Release date 31 October 2021
GDP in the EU-27 grew 4 times faster than in the USA in the Q3 2021
In the Q2 2021, negative demographic trends continued in Slovenia. Natural change in population (differences between deaths and live births) was negative (-726), while net migration (difference between immigrants and emigrants) was positive (607). The number of births was lower by 186 (4%) and the number of deaths higher by 263 (5%) than in the same period in 2020. In the Q2 2021, a quarter less people immigrated to Slovenia than in the same period in 2020. 5,065 people immigrated to Slovenia and 4,458 emigrated, or 29% more than in the same period in 2020. The number of emigrated Slovenian citizens (1,331) was lower than the number of emigrated foreign citizens (3,127). The net migration of foreign nationals was positive (by 1,120). The net migration of Slovenian citizens was negative; 513 more Slovenian citizens emigrated from the country than immigrated. In the first half of 2021, the population of Slovenia decreased by 1,970. The number of Slovenian citizens decreased by 3,257, while the number of foreign citizens increased by 1,287. According to our estimates, we expected an increase in the population, especially less negative natural change, and higher net migration, which should originate mainly due to the high demands of the labour market (especially in sectors of manufacturing, construction, transport). Since our estimates did not come true, we are not surprised that a larger proportion of Slovenian companies over time has challenges with current operations due to lack of employees..
In September 2021, real turnover in retail trade in Slovenia was 1.9% higher than in August 2021. It was higher in trade of motor fuels (by 8.4%) and in trade of food & beverages (by 1, 5%), while in non-food trade it was lower (by 0.1%). Compared to September 2019, real turnover in September 2021 was higher by 6.6%, whereas in the first nine months of 2021 it was 1.7% higher than in the same period in 2019. In recent months, only turnover in the trade in motor vehicles has been unexpectedly weak. In September 2021 it was 1.5% higher than in August, but it was 7.1% lower year on year. In the first nine months of 2021 it was 7.3% higher than in the same period in 2020, but at the same time 8.2% lower than in the same period in 2019. The key reason for the lag is delays in vehicle deliveries and not low customer demand. This means an increase in expectations for sales growth in this segment of trade in 2022.
More economic topics are below in the attachment.
US GDP strengthened by 2% in the Q3 2021 (annualized, this is not comparable to year-on-year growth), which was significantly less than the estimates of the panel of analysts at Refinitiv (2.7%). Compared to the previous quarter, US GDP increased by mere 0.5% in real terms (1.6% in the Q2 2021 compared to the Q1 2021), which was 4 times less than in EU-27. According to U.S. Census Bureau, this is due to an increase in the number of infections, which lead to weaker growth in domestic consumption. Delays in deliveries also had an impact on price increases (the difference between nominal and real growth in GDP was as high as 5.8%), and in real terms on weak demand growth. Nevertheless, the growth of the deflator in domestic consumption (price index, which takes into account the average change in prices of goods and services, investments, government spending) decreased from 5.8% in the Q2 2021 to 5.4% in the Q3 2021. Private household consumption was 1.6% stronger in the Q2 2021 (annualized), due to both a 7.9% increase in expenditure on goods and services and a 26% drop in vehicle sales due to supply problems. Investments in residential buildings were lower (in business buildings higher), mainly due to lower investments in renovations and less construction of detached houses. Government spending at the federal level declined due to the completion of the remittance program for households, which also contributed to slowing economic growth. At the level of individual states and local structures (districts and municipalities), spending has increased, mainly due to wage growth in the education sector. U.S. exports declined in the Q3 2021, mainly due to a decline in exports of goods, while exports of services increased. In the first eight months of 2021, the deficit in international trade in goods and services widened to USD 140 billion, a third more than in 2020. A more detailed explanation (technical explanation) by the U.S. Census Bureau reveals that the expiration of support schemes for U.S. households also contributed to reduced domestic consumption, despite the fact that the reduction in those social transfers was cushioned by income tax refunds for dependent members of about 30 million U.S. households.
GDP in the EU-27 strengthened by 2.1% in the Q3 2021 and by 2.2% in the EA-19 compared to the previous quarter, which was above our expectations (2% for EA-19). According to provisional data for 11 economies, representing 91% of EU-27 GDP, growth accelerated in Spain (from 1% in the 2nd quarter to 2%) and France (from 1.3% to 3.0%), while it slowed in Germany (from 1.9% to 1.8%). In Austria, growth remained high, at 3.3%, but was lower than in the Q2 2021 (+4.0%). Countries with a larger share of the service sector of the economy have thus strengthened their growth slightly, and a more detailed estimate and data for some other countries will be available on 16 November 2021.
Direct Investments 2020; annual publication, Bank of Slovenia, 29 October 2021 https://bankaslovenije.blob.core.windows.net/publication-files/direct-investment-2020_en.pdf, free access and download
Comment/Abstract: There are two important themes well covered in this monthly report: “COVID-19 and effect of remittances in CEE and Western Balkans” and “Russia and the European gas crisis”.
Global J.P. Morgan Composite PMI, October 2021 (HIS Markit, J.P. Morgan): 52.8
Comment: We expect the Global Composite PMI to decline slightly (from 53 in September 2021) mainly due to weaker global manufacturing sector where supply chain disruption probably peaked in October what should be also included in this survey. General mood in global services is not expected to sour as much, despite the fact that COVID-19 infections are overall rising.
“Forecasts usually tell us more of the forecaster than of the future.” (Warren Buffett)